Swedish telecommunication and data communication systems provider Ericsson (OMX: ERIC B) and Chinese competitor ZTE Corporation have resolved patent license disputes. The parties signed global cross-licensing agreement wherein both parties agree to drop all litigation pertaining to the matter.
Erisson had filed suits in several European countries against ZTE for alleged infringement of Ericsson’s patents in GSM and 3G/UMTS cellular technology. ZTE quickly countered with legal action in China blaming Ericsson (China) Communications Co. Ltd on violating its patents in core networks, GSM infrastructure and 4G infrastructure. ZTE is now signing a royalty bearing license agreement to some of Ericsson’s patents. Ericsson has a strong patent portfolio and it has not shied from opportunities to add to it.
Ericsson’s stock strengthened by one percent on Friday after the news became public. The company is set to report its Q4 quarterly earnings Wednesday morning before market open. The big negative impact from Sony Ericsson on Q4 2011 earnings was already communicated last week and ST-Ericsson, a joint venture of Ericsson and STMicroelectronics on wireless platform and semiconductor development, will report its earnings on Monday after market close.
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